EPA Considers Delaying Friday Biofuel Announcement: Sources

by Jarrett Renshaw and Chris Prentice (Reuters) The U.S. Environmental Protection Agency (EPA) is considering delaying its widely anticipated announcement on Friday on 2019 renewable fuel volumes as it re-examines plans to force larger refineries to make up for gallons exempted at smaller plants, according to two sources familiar with the process.

EPA Administrator Scott Pruitt and Agriculture Secretary Sonny Perdue were set to travel to a farm outside of Kansas City, Missouri, where they were expected to announce a proposal for 2019 renewable fuel requirements on Friday.

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The RFS, created in 2005, requires fuel companies to use increasing volumes of renewable fuels like ethanol with their petroleum products each year, but the EPA has used its authority to provide waivers to an unusually large number of small refineries releasing them of their obligation.

The EPA and the White House were still hashing out the details of a last-minute plan to appease farmers as part of the annual volumes announcement, the sources said, and the announcement could be postponed if an agreement is not reached.

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The plan under consideration would force large refiners to blend extra volumes to compensate for the hardship waiver exemptions for small refiners. The idea was met with stiff oil industry opposition on Wednesday, sending the price of compliance credits surging.

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The EPA is required to set targets for blending volumes by Nov. 30 for the following year, and tends to announce its proposal months in advance of that deadline to gather feedback.

As of Thursday morning, the agency was seen as likely to include a plan on how to reallocate waived volumes into this year’s proposal, according to sources.

One of the sources said the White House – which is trying to appease the rival corn and oil industries – was “blindsided” by the idea, triggering the current re-assessment of the plan. READ MORE

Excerpt from Politico’s Morning Energy: EPA had been planning to propose a rule today that would set biofuel blending requirement for 2019 while also laying out a plan to reallocate biofuel volumes that small refiners shed though EPA waivers in 2017 to larger refiners next year. But furious refiners were leaning hard on the agency to dump the reallocation proposal, or at least wait at least until next week, and EPA appeared to be considering holding off, oil industry sources said. “There has been a massive backlash over the rumors of reallocation,” said one refining industry source. “The fact it was even being considered in the [Renewable Volume Obligation rule] even took the White House by surprise.”

Or is it on? But a biofuels source said Pruitt and USDA Secretary Sonny Perdue are expected to make the announcement as planned from a farm in Missouri.

But what about the volumes? Both oil and biofuel sources agreed the blending requirements for 2019 would likely resemble what POLITICO reported in May: Conventional ethanol would be set at 15 billion gallons, the legal maximum, with an increase of around 500 million gallons of advanced biofuels. Biodiesel volumes, which are set a year in advance, would stay level at 2.1 billion gallons for 2020, though one biofuels source thought there might be a modest increase. READ MORE